Under a no-cash deal, Yahoo will use Microsoft’s new Bing search engine on its own sites, while Yahoo will act as the exclusive global sales force for the companies’ premium search advertisers.<\/p>\n
The Sunnyvale, California, company also estimated the deal would provide it with a $275m benefit to annual operating cash flow.<\/p>\n
“This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes the foundation for a new era of internet innovation and development,” Yahoo chief executive Carol Bartz said in a statement.<\/p>\n
Yahoo and Microsoft reached agreement on Wednesday on a long-awaited web search partnership that would unite the two companies against market leader Google.<\/p>\n
The agreement, which has a 10-year term, will be subject to review by US regulatory authorities, the companies said.<\/p>\n
It is restricted to internet search and related advertising revenue, while the pair would retain full autonomy on other properties and products such as email, instant messaging and display advertising.<\/p>\n
The partnership, Microsoft said, “will improve the web search experience for users and advertisers, and deliver sustained innovation to the industry”.<\/p>\n
Microsoft chief executive Steve Ballmer said the deal will enable Bing to better compete against Google, as well as attract more users and advertisers.<\/p>\n
“Through this agreement with Yahoo, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company,” Ballmer said.<\/p>\n
“This agreement gives us the scale and resources to create the future of search.”<\/p>\n
Calling the link-up a “significant opportunity” Yahoo chairperson Roy Bostock said the company’s board backed it with its “full and unanimous support”.<\/p>\n
“Microsoft is an industry innovator in search, and it is a great opportunity for us to focus our investments in other areas critical to our future,” he said.<\/p>\n
According to research firm Comscore, Google has a 65% share of the lucrative search market, followed by Yahoo! with 19.6% and Microsoft with 8.4%.<\/p>\n